AN ACT Relating to local improvement districts; adding a new section to chapter 39.46 RCW; and adding a new chapter to Title 39 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The purpose of this chapter and section 53 of this act is to provide an optional set of laws that clarify, simplify, and make uniform the procedures by which local governments may create local improvement districts, impose and collect special assessments, and issue and sell local improvement district bonds. The authorities included in this chapter and section 53 of this act are supplementary and in addition to any authorities otherwise existing. A local government may not use any of the authorities included in this chapter and section 53 of this act without conforming with the entire chapter and section 53 of this act and any limitations and restrictions included in this chapter and section 53 of this act.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter and section 53 of this act.

(1) "City" means a city or town.

(2) "Governing body" means the council, commission, or other legislative authority of a local government.

(3) "Local government" means a county, city, port district, public utility district, sewer district, water district, irrigation district, or other municipal corporation or quasi-municipal corporation otherwise authorized by statute to create local improvement districts.

(4) "Local improvement district" means a device or mechanism created by a local government where a geographic area is designated in which public improvements are located or proposed to be located, together with the real property that is specially benefited by its proximity to the public improvements, and the damages or costs of the construction, acquisition, maintenance, enlargement, extension, or operation of the public improvements, and related costs, are to be defrayed wholly or in part by the imposition of special assessments on the benefited real property. Local improvement districts include local utility districts created by public utility districts and road improvement districts created by counties.

(5) "Local improvement district bonds" means bonds, notes, or other evidences of indebtedness issued and sold by a local government that provide moneys needed to pay for all or part of the public improvements financed through a local improvement district, which bonds, notes, or other evidences of indebtedness are not general indebtedness of the local government but are special indebtedness of the local government, and which bonds, notes, or other evidences of indebtedness are payable exclusively from special assessments imposed within the local improvement district, from reserve funds that may be created, and from a guaranty fund that may be created.

(6) "Public improvements" means the public facilities, utilities, equipment, or utility services that a local government is authorized to finance through the creation of a local improvement district.

(7) "Resolution" means the method by which a governing body takes formal action and adopts legislative provisions and matters of some permanency, including ordinances and resolutions.

(8) "Special assessment" means an extraction or charge imposed upon real property within a local improvement district that is specially benefited, or will be specially benefited, from the public improvements financed in whole or in part by the local improvement district.

(9) "Utility local improvement district" means a type of local improvement district used to construct utility public improvements where both special assessments and a portion of the utility rates, charges, or fees imposed on the use or availability of the utility are earmarked to retire revenue bonds, instead of local improvement district bonds, issued to finance all or part of the utility public improvements.

NEW SECTION. Sec. 3. Any local government otherwise authorized to create local improvement districts may create local improvement districts, impose and collect special assessments related to the local improvement districts, and issue and sell local improvement district bonds, or revenue bonds if utility local improvement districts are created, as provided in this chapter and section 53 of this act. A local government only may create a local improvement district to finance those public improvements that the local government is authorized by other law to provide and finance through the establishment of local improvement districts.

NEW SECTION. Sec. 4. A local improvement district may be initiated upon either: (1) The local government governing body adopting a resolution of intention to create the local improvement district; or (2) the filing of a petition requesting the local improvement district, which petition is signed by the owners of at least a majority of the acreage within the proposed local improvement district. Such a resolution of intention or petition both shall describe the proposed boundaries of the local improvement district and the general nature and extent of the proposed public improvements in detail sufficient to apprise the reader of the type of public improvements proposed to be made, although other public improvements may be financed by the local improvement district that are not expressly described if these other public improvements are directly incidental to the described public improvements.

A resolution of intention shall also designate the number of the proposed local improvement district, shall state the initial estimated cost of the public improvements and the proposed proportionate amount thereof that will be borne by special assessments imposed upon real property within the local improvement district, and shall fix a date, time, and place for a public hearing on the formation of the proposed local improvement district. Unless an emergency exists, the date for the public hearing shall be at least thirty days and no more than ninety days from the date when the resolution of intention is adopted.

Petitions shall be filed with the governing body of the local government that is requested to create the local improvement district, or the clerk, secretary, or other person designated by the governing body to accept such petitions. The governing body shall determine the sufficiency of the signatures, which shall be conclusive upon all persons. No person may withdraw his or her name from a petition after it has been filed. If the governing body determines the petitions to be sufficient, and that the proposed local improvement district appears to be in the public interest and the financing of the public improvement is feasible, it shall adopt a resolution of intention to create the local improvement district, setting forth all of the details required to be included when a resolution of intention is initiated by the governing body.

NEW SECTION. Sec. 5. Notice of the public hearing shall be published in at least two consecutive issues of a newspaper of general circulation in the proposed local improvement district, the date of the first publication to be at least fifteen days prior to the date fixed for the public hearing by the resolution of intention. Notice of the public hearing also shall be given to the owner or reputed owner of any lot, tract, or parcel of real property within the proposed local improvement district by mailing the notice at least fifteen days before the date fixed for the public hearing to the owner or reputed owner of the real property as shown on the tax rolls of the county assessor at the address shown thereon. Whenever such notices are mailed, the local government shall maintain a list of these property owners or reputed property owners and their addresses, which list shall be made available for public perusal. Notice of the public hearing also shall be posted in at least three conspicuous places in or around the proposed local improvement district.

Published and mailed notices of the public hearing shall: (1) Indicate whether the proposed local improvement district was initiated by petition or resolution; (2) designate the proposed local improvement district by number; (3) set forth the general nature of the proposed public improvements in the same detail as required in section 4 of this act, the initial estimated cost of the public improvements, and the proportion of total cost thereof proposed to be borne by special assessments imposed upon real property within the proposed local improvement district; (4) indicate the date, time, and place of the public hearing designated in the resolution of intention; (5) describe the process by which a local improvement district is created, the final assessment roll is confirmed, and special assessments or installments paid, including: (a) The process provided in section 8 of this act, if the local improvement district is initiated by resolution, by which property owners may file written objections and cause the local government to lose the authority to proceed with the creation of the proposed local improvement district; and (b) the extraordinary process provided in section 8 of this act, if the public improvement is sanitary sewers, water mains, or fire hydrants, by which an emergency can be declared and the local government can proceed with creating the local improvement district notwithstanding the timely filing of sufficient objections; (6) indicate that the purpose of this public hearing is to solicit comments from affected persons on the desirability of the proposed local improvement district, the estimated cost of the public improvements, and the proportion of the estimated cost to be borne by special assessments imposed upon real property within the proposed local improvement district, but that it is not the forum at which the level of special assessments on separate lots, tracts, or parcels of real property will be considered; and (7) provide the times and location where the names of property owners are kept on file for public perusal. Posted notices need only include (1) through (4) and (6) of this section, but also shall include a vicinity sketch or map representation of the boundaries of the proposed local improvement district.

In the case of the notice sent to each owner or reputed owner by mail, the notice shall set forth the initial estimated amount of the cost of the public improvements to be borne by special assessment on the lot, tract, or parcel of real property owned by the owner or reputed owner.

If the local government is a county or city that has designated a committee of the governing body or an officer to hear complaints and make recommendations to the full governing body, as provided in section 9 of this act, the notice also shall describe this additional step before the full governing body may adopt a resolution creating the local improvement district.

NEW SECTION. Sec. 6. The governing body of the local government shall hold a public hearing on the proposed local improvement district at the date, time, and place designated in the resolution of intention. The purpose of this public hearing is to solicit comments on the proposed local improvement district, the estimated cost of the public improvements, and the proportion of the cost to be borne by special assessments imposed upon real property within the proposed local improvement district, but not concerning the amount of initial estimated special assessments on separate lots, tracts, or parcels of real property.

At this public hearing the governing body shall hear objections from any person affected by the formation of the proposed local improvement district. The public hearing may be extended to other times and dates declared at the public hearing. The governing body may make such changes in the boundaries of the local improvement district or such modification in plans for the proposed public improvements as it deems necessary.

An amended resolution of intention must be passed, new notice to real property owners given in the manner and form and within the time provided for the original notice, and a new public hearing must be held if the governing body: (1) Alters the general nature of the proposed public improvements; (2) alters the plans for the proposed public improvements; (3) increases the initial estimated cost of the proposed public improvements to an amount greater than one hundred twenty-five percent of the initial estimated cost; or (4) alters the boundaries of the proposed boundaries to include property that was not previously included.

NEW SECTION. Sec. 7. After the public hearing, the governing body of the local government may adopt a resolution ordering the public improvements and creating the local improvement district if the governing body finds that it is in the public interest to proceed with the creation of the local improvement district and the financing of the public improvements is feasible. The creation of the local improvement district shall not be effective until at least forty-five days after the adoption of this resolution. The resolution shall describe the boundaries of the local improvement district and the general nature of the public improvements in the same detail as is required in section 4 of this act, and shall state the estimated cost of the public improvements and the estimated cost of the public improvements to be borne by special assessments imposed upon real property within the proposed local improvement district. Within fifteen days of the adoption of this resolution ordering the public improvements and creating the local improvement district, the local government shall cause to be filed with the officer authorized to collect the special assessments: (1) The title of the public improvement; (2) the number of the local improvement district; (3) a copy of the diagram or print showing the boundaries of the local improvement district; and (4) the preliminary assessment roll or abstract of the local improvement district showing: (a) Each lot, tract, or parcel of real property within the proposed local improvement district that will be specially benefited by the public improvements; (b) the names and mailing addresses of the owner or reputed owners of each lot, tract, or parcel of real property; and (c) the estimated special assessment proposed to be borne by each lot, tract, or parcel of real property.

The governing body shall publish a notice that it has adopted a resolution creating a local improvement district within ten days of the date that the resolution was adopted. The notice shall be published in a newspaper of general circulation in the local improvement district. This notice shall include a description of the process provided in section 8 of this act for the owners of sufficient real property within the proposed local improvement district to file written objections to the proposed local improvement district and cause the local government to lose the authority to proceed with the local improvement district. If the public improvements are sanitary sewers, water mains, or fire hydrants, the notice also shall describe the extraordinary process provided in section 8 of this act by which an emergency can be declared and the local government can proceed with creating the local improvement district notwithstanding the timely filing of sufficient objections.

After the local improvement district is created, the governing body shall acquire all necessary real property for the public improvements, proceed with the work, and pay all damages caused by the improvements.

NEW SECTION. Sec. 8. A proposed local improvement district initiated by resolution shall not be created if written objections to its formation are filed with the governing body of the local government within a thirty-day period after the adoption of the resolution creating the local improvement district, which objections are signed by the owners of lots, tracts, or parcels of real property within the proposed local improvement district that are subject to at least a majority of the total proposed special assessments as provided in the preliminary assessment roll or abstract.

However, the local improvement district may be created by the local government if both:

(1) The public improvements are: (a) Sanitary sewers where the local health officer, or the department of ecology, files with the governing body a report showing the necessity for the sanitary sewers; or (b) water mains where the local health officer, or the department of social and health services, files with the governing body a report showing the necessity for the water main; or (c) fire hydrants where the chief of the fire department or fire district within which the fire hydrants will be located files with the governing body a report showing the necessity for the fire hydrants; and

(2) A resolution is adopted declaring an emergency and finding the public improvements to be necessary for the protection of the public health and safety as follows: (a) If the proposed local improvement district is located within a city, the city council adopts the resolution; (b) if the proposed local improvement district is located in the unincorporated area of a county, the county legislative authority adopts the resolution; or (c) if the proposed local improvement district is located both within an incorporated city and the unincorporated area of a county, both the county legislative authority and city council adopt such resolutions. Such a resolution must be adopted by unanimous vote of all the members present, which must be at least a quorum of the entire governing body. This requirement for action by a city council or county legislative authority applies even if the local government creating the local improvement district is a local government other than a city or county.

NEW SECTION. Sec. 9. The governing body of a city with a population of fifteen thousand or more and the governing body of any county may adopt an ordinance providing for a committee of the governing body, or an officer, to hold public hearings on the proposed formation of a local improvement district and hear objections to the proposed formation as provided in section 6 of this act. The committee or officer shall make a recommendation to the full governing body, which need not hold a public hearing on the proposed creation of the local improvement district. The full governing body by resolution may approve or disapprove the recommendation. This resolution shall be subject to the conditions provided in sections 7 and 8 of this act.

NEW SECTION. Sec. 10. Except as provided in section 8 of this act, the action and decision of the governing body to create a local improvement district shall be final and conclusive. No lawsuit may be maintained challenging the jurisdiction or authority of the governing body to proceed with the public improvements and creating the local improvement district or in any way challenging the validity of the actions or decisions or any proceedings relating to the actions or decisions unless the lawsuit is served and filed no later than forty days after publication of a notice that the resolution has been adopted ordering the improvements and creating the local improvement district. Written notice of the appeal shall be filed with the governing body and clerk of the superior court in the county in which the property is situated.

NEW SECTION. Sec. 11. A local government may create a local improvement study district to finance a study of the feasibility of creating a local improvement district, including the following: (1) Preparation of preliminary plans and designs for the public improvements proposed to be financed by the proposed local improvement district; (2) designation of the proposed boundaries of the proposed local improvement district; (3) estimation of the total cost of the proposed public improvements; (4) estimation of the proportion of the total cost of the proposed public improvements to be borne by special assessments imposed upon real property within the proposed local improvement district; and (5) estimation of the amount of the cost of the proposed public improvements to be allocated to each lot, tract, or parcel of real property in the proposed local improvement district.

A local improvement study district may be initiated by petition or resolution in the same manner as a local improvement district is initiated. Except as provided in this section, the procedure to create a local improvement study district, and impose special assessments to finance the study, is the same as for a local improvement district.

Consideration of the proposed local improvement study district and the final assessment roll shall be at the same public hearing, which may be continued. At this public hearing the governing body shall address the proposed boundaries of the local improvement study district, the purposes of the local improvement study district, the total amount proposed to be obtained from special assessments to finance the study, and the proposed individual special assessments on each included lot, tract, or parcel of real property to finance the study. Published and posted notices shall describe these subjects, but need not include a list of the proposed individual special assessments to finance the study. Notices mailed to each property owner shall describe these subjects, including the proposed special assessment for the lot, tract, or parcel of real property owned by the property owner.

After the public hearing, the governing body may adopt a resolution creating the local improvement study district and confirming the final assessment roll. Unless protests are filed within the thirty-day period after the adoption of the resolution creating the local improvement study district, the local improvement study district shall be created and the authority to impose and collect the special assessments as provided in the final assessment roll shall exist. Any legal challenge to the local improvement study district or the special assessments must be filed within forty days of the adoption of this resolution.

The special assessments shall be imposed in the same manner as special assessments in local improvement districts are imposed, except installment payments shall not be allowed.

NEW SECTION. Sec. 12. Local governments that are authorized to construct utility public improvements that will generate periodic utility rates, utility charges, or utility fees may create a utility local improvement district to finance all or part of the utility public improvements. The initiation and formation of a utility local improvement district and the levying, collecting, and enforcement of special assessments and installments on special assessments shall be in the same manner and subject to the same procedures and limitations as the initiation and formation of local improvement districts and the levying, collecting, and enforcement of special assessments and installments in the local improvement district.

It shall be specified in any resolution of intention or petition initiating the formation of a utility local improvement district, and in other resolutions relating to the utility local improvement district, that a utility local improvement district is being formed or is being proposed to be formed and that the special assessments or installments shall be for the sole purpose of payment into such revenue bond fund or funds as may be specified by the governing body for the payment of revenue bonds used to defray the cost of all or part of such public utility improvements or into a special fund or funds to defray the costs of all or part of the utility local improvements. The governing body also shall pledge a portion of the utility rates, utility charges, or utility fees, derived from the utility public improvements proposed to be financed in part by a utility local improvement district, or from the entire utility system of which the utility public improvements are part, to be placed into the revenue bond fund for the payment of revenue bonds used to defray the cost of all or part of such public utility improvements.

Revenue bonds shall be issued and sold in accordance with chapter 39.46 RCW.

NEW SECTION. Sec. 13. The governing body of a local government may by resolution convert any then existing local improvement district into a utility local improvement district at any time prior to the adoption of the resolution approving and confirming the final assessment roll of the local improvement district. The resolution converting the local improvement district must conform with all the requirements provided in section 12 of this act for the original creation of a utility local improvement district.

NEW SECTION. Sec. 14. After the public improvements are completed, the local government shall prepare a proposed final assessment roll which shall include special assessments equalling the proportion of the cost of the public improvements to be borne by the real property within the local improvement district, including any interim finance costs. The proposed final assessment roll shall list: (1) Each separate lot, tract, or parcel of real property in the local improvement district; (2) the name and address of the owner or reputed owner of each lot, tract, or parcel of real property as shown on the tax rolls of the county assessor; and (3) the special assessment proposed to be imposed on each lot, tract, or parcel of real property. A public hearing on the final assessment roll shall be held by the governing body.

At the time, date, and place fixed for a public hearing, the governing body shall act as a board of equalization and hear objections to the final assessment roll, and at the times to which the public hearing may be adjourned, the governing body may correct, revise, raise, lower, change, or modify the final assessment roll or any part thereof, or set the proposed final assessment roll aside and order a new proposed roll to be prepared. The issues to be considered at this public hearing include only: (a) Whether the special benefits to a lot, tract, or parcel of real property arising from the public improvements are greater then the special assessments included on the proposed final assessment role for the lots, tracts, or parcels of real property; and (b) the proportionality of the special assessments among the specially benefited lots, tracts, or parcels of real property. The governing body shall confirm and approve a final assessment roll by adoption of a resolution.

If a proposed final assessment roll is amended to raise any special assessment appearing thereon or to include omitted real property, a new public hearing shall be held. The new public hearing shall be limited to considering the increased special assessments or omitted real property. Notices shall be sent to the owners or reputed owners of the affected real property in the same manner and form and within the time provided for the original notice.

Objections to a proposed final assessment roll must be made in writing, shall clearly state the grounds for objections, and shall be filed with the governing body prior to the public hearing. Other objections shall not be heard. Objections to a special assessment that are not made as provided in this section shall be deemed waived and shall not be considered by the governing body or a court on appeal unless made in accordance with this section.

NEW SECTION. Sec. 15. Notice of the original public hearing on the proposed final assessment roll, and any public hearing held as a result of raising assessments or including omitted property, shall be published, posted, and mailed to the owner or reputed owner of the real property as provided in section 5 of this act for the public hearing on the formation of the local improvement district. However, the notice need only state that: (1) A public hearing on the proposed final assessment roll will be held, giving the time, date, and place of the public hearing; (2) the proposed final assessment roll is available for public perusal, giving the times and location where the proposed final assessment roll is available for public perusal; (3) the issues that may be considered at the public hearing are limited to: (a) Whether the special benefits to the lots, tracts, or parcels of real property arising from the public improvements are greater than the special assessments included on the proposed final assessment roll for the lots, tracts, or parcels of real property; and (b) the proportionality of the special assessments among the specially benefited lots, tracts, or parcels of real property; (4) objections to the proposed final special assessment must be in writing, include clear grounds for objections, and must be filed prior to the public hearing; and (5) failure to so object shall be deemed to waive an objection.

Notices mailed to the owners or reputed owners additionally shall indicate the amount of special assessment ascribed to the particular lot, tract, or parcel of real property owned by the person so notified.

NEW SECTION. Sec. 16. The governing body of a city with a population of fifteen thousand or more and the governing body of any county may adopt an ordinance providing for a committee of the governing body, or an officer, to hear objections to the proposed final assessment roll, act as a board of equalization, and make recommendations to the full governing body, which need not hold a public hearing on the proposed final assessment roll. The ordinance shall provide a process by which an appeal may be made in writing to the full governing body by a person protesting his or her special assessment as confirmed by the committee or officer. The full governing body by resolution shall approve the final assessment roll, modify and approve the final assessment roll as a result of hearing objections, or reject the final assessment roll and return it to the committee or officer for further work and recommendations. No objection to the decision of the full governing body approving the final assessment roll may be considered by a court unless an objection to the decision has been filed timely with the governing body as provided in this section.

NEW SECTION. Sec. 17. The decision of a governing body upon any objection to the final assessment roll may be appealed to the superior court only if the objection had been made timely in the manner prescribed in this chapter. The appeal shall be made within ten days after publication of a notice that the resolution confirming the final assessment roll has been adopted by filing written notice of the appeal with the governing body of the local government and the clerk of the superior court in the county in which the real property is situated. The notice of appeal shall describe the real property and set forth the objections of the appellant to the special assessment. Within ten days from the filing of such notice of appeal with the clerk of the superior court, the appellant shall file with the clerk of the court a transcript consisting of the final assessment roll and his or her objections thereto, together with the resolution confirming such final assessment roll and the record of the local government governing body with reference to the special assessment, which transcript, upon payment of the necessary fees therefor, shall be furnished by an officer of the local government and by him or her certified to contain full, true, and correct copies of all matters and proceedings required to be included in the transcript. Such fees shall be the same as the fees payable to the county clerk for the preparation and certification of transcripts on appeal to the supreme court or the court of appeals in civil actions.

At the time of the filing of the notice of appeal with the clerk of the superior court a sufficient bond in the penal sum of two hundred dollars, with sureties thereon as provided by law for appeals in civil cases, shall be filed conditioned to prosecute such appeal without delay, and if unsuccessful, to pay all costs incurred by the local government because of the appeal. The court may order the appellant, upon application therefor, to execute and file such additional bond or bonds as the necessity of the case may require.

Within three days after such transcript is filed in the superior court, the appellant shall give written notice to the local government governing body that such transcript is filed. The notice shall state a time, not less than three days from the service thereof, when the appellant will call up the cause for hearing.

The superior court shall, at this time or at such further time as may be fixed by order of the court, hear and determine such appeal without a jury, and such cause shall have preference over all civil causes pending in the court, except proceedings under an act relating to eminent domain in such local government and actions of forcible entry and detainer. The judgment of the court shall confirm, correct, modify, or annul the special assessment insofar as the same affects the property of the appellant. A certified copy of the decision of the court shall be filed with the officer having custody of the final assessment roll, and he or she shall modify and correct such final assessment roll in accordance with the decision.

An appeal shall lie to the supreme court or the court of appeals from the judgment of the superior court, as in other cases, however, such appeal must be taken within fifteen days after the date of the entry of the judgment of the superior court, and the record and opening brief of the appellant in the cause shall be filed in the supreme court or the court of appeals within sixty days after the appeal is taken by notice as provided in this section. The time for filing the record and serving and filing of briefs may be extended by order of the superior court, or by stipulation of the parties concerned. The supreme court or the court of appeals on such appeal may correct, modify, confirm, or annul the special assessment insofar as the same affects the real property of the appellant. A certified copy of the order of the supreme court or the court of appeals upon such appeal shall be filed with the officer having custody of such final assessment roll, who shall thereupon modify and correct such final assessment roll in accordance with such decision.

NEW SECTION. Sec. 18. All real property included within a local improvement district shall be considered to be the real property specially benefited by the public improvements and shall be the real property upon which special assessments are imposed to pay the costs of the public improvements, or such part of the costs as may be chargeable against the real property specially benefited. The costs of the public improvements include all related financial, legal, design, engineering, accounting, notice provision, appraisal, increasing or establishing a guaranty fund, providing a separate reserve fund or other security for the payment of principal and interest on bonds, and all other related costs. The special assessments shall be imposed on real property in accordance with the special benefits conferred on the real property up to but not in excess of the total costs and expenses of the public improvements as provided in the final assessment roll.

Special assessments may be measured by front footage, acreage, or any other method or combination of methods that are deemed to fairly reflect special benefits. Zones around the public improvements may be used that reflect different levels of benefit in each zone that are measured by a front footage, acreage, or other method.

Public property, including property owned by the state of Washington, shall be subject to special assessments to the same extent that private property is subject to the special assessments.

NEW SECTION. Sec. 19. Special assessments and any installments on special assessments shall be collected by the treasurer of the local government. Any local government with a treasurer other than the county treasurer may contract with the county treasurer, and the county treasurer may contract, for the collection of special assessments, and any installments on special assessments, imposed on real property within the county. The county treasurer may include the collection of installments on special assessments with the collection of property taxes.

The treasurer shall publish a notice that the assessment roll has been confirmed, that the special assessments are to be collected, and that all or any portion of the special assessments may be paid, within thirty days from the date of publication of the first notice without penalty, interest, or costs. This notice shall be published in a newspaper of general circulation in the local improvement district.

Within ten days of the first newspaper publication, the treasurer shall notify by mail each owner or reputed owner of real property whose name appears on the assessment roll, at the address shown on the assessment roll, for each item of real property described on the list, of the nature of the special assessment, of the amount of the real property subject to the special assessment, of the total amount of the special assessment due, and of the thirty-day period during which the special assessment may be paid without penalty, interest, or costs.

NEW SECTION. Sec. 20. All or any portion of the special assessments may be paid without interest, penalty, or costs during this thirty-day period and placed into a special fund to defray the costs of the public improvement. The remainder shall be paid in installments as provided in a resolution adopted by the governing body, but the last installment shall be due at least two years before the maximum term of the bonds issued to pay for the public improvements, if bonds are issued. A twenty-day period shall be allowed after the due date of any installment within which no interest, penalty, or costs on the installment may be imposed.

The local government shall establish by general resolution an amount of interest that will be imposed on late special assessments or late installments of special assessments. The general resolution shall also specify the penalty, in addition to the interest, that will be imposed on late special assessments or installments which shall not be less than five percent of the delinquent special assessment or installment.

The owner of any lot, tract, or parcel of real property charged with special assessments may redeem it from all liability for the unpaid amount of the installments by paying, to the treasurer, the remaining portion of the installments that is attributable to principal on the local improvement district or revenue bonds, or the remaining amount of the special assessment if bonds are not issued.

NEW SECTION. Sec. 21. The final assessment roll shall be filed with the treasurer who shall immediately post the final assessment roll upon his or her index of local improvement special assessments against the real properties affected by the public improvements.

NEW SECTION. Sec. 22. The special assessment imposed upon the respective lots, tracts, or parcels of real property in the final assessment roll confirmed by resolution of the governing body for the purpose of paying the cost in whole or in part of any public improvements shall be a lien upon the real property assessed from the time the final assessment roll is placed in the hands of the treasurer for collection, but as between the grantor and grantee, or vendor and vendee of any real property, when there is no express agreement as to payment of the special assessments against the real property, the lien of such special assessment shall attach thirty days after the filing of the diagram or print and the estimated cost of such public improvements to be borne by each lot, tract, or parcel of real property as provided in section 7 of this act. Interest, penalty, and costs shall be included in and shall be a part of the special assessment lien.

The special assessment lien shall be paramount and superior to any other lien or encumbrance theretofore or thereafter created except a lien for general taxes.

NEW SECTION. Sec. 23. Special assessments shall be valid and enforceable as such and the lien thereof on the real property assessed shall be valid if the governing body of the local government in making the special assessments acted in good faith and without fraud.

NEW SECTION. Sec. 24. Whenever special assessments for a local improvement district are not valid in whole or in part for want of form, insufficiency, informality, irregularity, or nonconformance with the provisions of law, the governing body may reassess the special assessments and enforce their collection in accordance with the provisions of law in effect at the time the reassessment is made. The authority to reassess shall apply to original special assessments, special assessments upon omitted real property, and supplemental special assessments.

The resolution ordering the reassessment must be adopted within ten years from the time the original special assessments for the same public improvements were finally held to be invalid or insufficient or for any cause set aside, in whole or in part, or their enforcement directly or indirectly denied by the courts.

The fact that the contract has been let or that the improvement has been made and completed in whole or in part shall not prevent the reassessment from being made.

All sums paid on the former attempted special assessments shall be credited to the real property on account of which they were paid.

NEW SECTION. Sec. 25. If by reason of mistake or inadvertence or for any cause real property in a local improvement district which except for its omission would have been subject to special assessment has been omitted from the assessment roll, the governing body, upon its own motion, or upon the application of the owner of any real property in the local improvement district which has been assessed for the public improvements, may proceed to assess the real property so omitted in accordance with the special benefits accruing to it by reason of the public improvements in proportion to the special assessments levied upon other real property in the local improvement district.

NEW SECTION. Sec. 26. If by reason of mistake or inadvertence or for any other cause the amount assessed was not equal to that portion of the costs of the public improvements determined at the time of the creation of the local improvement district to be payable from special assessments, the governing body shall make supplemental special assessments on all the real property in the local improvement district.

The resolution ordering supplemental special assessments must be adopted by the governing body within ten years from the time that it was finally determined that the total amount of valid special assessments levied and assessed on account of the public improvements was insufficient to pay the whole or that portion of the cost thereof to be paid by special assessment.

NEW SECTION. Sec. 27. Every reassessment, special assessment on omitted real property, and supplemental special assessment shall be made upon the real property which has been or will be specially benefited by the public improvements financed in whole or in part by the local improvement district, as provided in section 18 of this act.

All of the provisions of law relating to the filing of assessment rolls, time and place for hearing thereon, notice of hearing, the hearing upon the roll, the confirmation of the assessment roll, the time when the special assessments become a lien upon the real property assessed, the proceedings on appeal from any such special assessments, the method of collecting the special assessments, and all proceedings for enforcing the lien thereof shall be had and conducted the same in the case of reassessments, special assessments on omitted real property, or supplemental special assessments as in the case of original special assessments.

NEW SECTION. Sec. 28. Whenever any real property against which there has been levied any special assessment by any local government has been sold in part, subdivided, or short subdivided, the governing body of the local government may order a segregation of the special assessment. If an installment has been made, the segregation shall apportion the remaining installments on the parts or lots, tracts, or parcels of real property created.

Any person desiring to have such a special assessment against a lot, tract, or parcel of real property segregated to apply to smaller parts thereof shall apply to the governing body of the local government which levied the special assessment. If the governing body determines that a segregation should be made, it shall by resolution order the local government treasurer to segregate the special assessment on the original assessment roll as directed in the resolution. The segregation shall be made as nearly as possible on the same basis as the original special assessment was levied, and the total of the segregated parts of the special assessment shall equal the amount of the special assessment unpaid before segregation. The resolution shall describe the original tract and the amount and date of the original special assessment and shall define the boundaries of the divided parts and the amount of the special assessment chargeable to each part. A certified copy of the resolution shall be delivered to the treasurer who shall proceed to segregate the special assessment upon being tendered a fee of five dollars for each tract of land for which a segregation is to be made. In addition to such charge the governing body may require as a condition to the order of segregation that the person seeking it pay the local government the reasonable engineering and clerical costs incident to making the segregation.

NEW SECTION. Sec. 29. If two years worth of installments on a special assessment are delinquent on the first day of January in any year, or if the final installment thereof has been delinquent for more than one year, the local government shall proceed with the foreclosure of the delinquent special assessment or delinquent installment or installments thereof by proceedings brought in its own name in the superior court of the county in which the property subject to such special assessment is located.

The proceedings shall be commenced on or before March 1st of that year or on or before such other date in such year as may be fixed by general resolution, but not before the treasurer has notified by certified mail thirty days before the commencement of the proceedings the persons whose names appear on the final assessment roll as owners of the real property charged with the special assessment or installments which are delinquent, at the address last known to the treasurer. If the person whose name appears on the tax rolls of the county assessor as owner of the real property, or the address shown for the owner, differs from that appearing on the final assessment roll, then the treasurer shall also mail a copy of the notice to that person or that address.

The notice shall state the amount due upon each separate lot, tract, or parcel of real property and the date after which the proceedings will be commenced. The treasurer shall file with the clerk of the superior court at the time of commencement of the foreclosure proceeding the affidavit of the person who mailed the notices. This affidavit shall be conclusive proof of compliance with the requirements of this section.

NEW SECTION. Sec. 30. An action to collect a special assessment or any installment or installments thereof or to enforce the lien thereof whether brought by the local government or by any person having the right to bring such action must be commenced within ten years after the special assessment becomes delinquent or within ten years after the last installment becomes delinquent if the assessment is payable in installments: PROVIDED, That the time during which payment of principal in special assessments imposed by cities is deferred as to economically disadvantaged property owners as provided in RCW 35.50.030 shall not be a part of the time limited for the commencement of action.

NEW SECTION. Sec. 31. When a special assessment is payable in installments, the enforcement of the lien of any installment shall not prevent the enforcement of the lien of any subsequent installments.

A local government may provide by general resolution that upon failure to pay any installment due the entire special assessment shall become due and payable and the collection thereof enforced by foreclosure: PROVIDED, That the payment of all delinquent installments together with interest, penalty, and costs at any time before entry of judgment in foreclosure shall extend the time of payment on the remainder of the special assessment as if there had been no delinquency or foreclosure. When foreclosure of two or more installments of the same special assessment on any lot, tract, or parcel of real property is sought, the treasurer shall cause such lot, tract, or parcel of real property to be dismissed from the action if at least one year's worth of installments first delinquent together with interest, penalty, and costs are paid at any time before sale.

NEW SECTION. Sec. 32. In foreclosing special assessment liens, a local government shall proceed by filing a complaint in the superior court of the county in which the real property subject to the special assessment is located. It shall be sufficient to allege in the complaint: (1) The passage of the resolution authorizing the public improvements; (2) the making of the public improvements; (3) the levying of the special assessments; (4) the confirmation thereof; (5) the date of delinquency of the special assessment, or the installment or installments of the special assessment, for the enforcement of which the action is brought; and (6) that they have not been paid prior to delinquency or at all.

NEW SECTION. Sec. 33. In foreclosing special assessments, the summons shall be substantially in the following form:

@p7 SUPERIOR COURT OF WASHINGTON

FOR [ .......... ] COUNTY

!ix!tn3@w1, !tj1!tcü@p8

!w PLAINTIFF, !tj1!tcï!trNo.!sc ,1

!ae0!tj2!tl .....

!tcv. !tcï

@w1, !tj1!tcý !tcSUMMONS!sc ,001FOR!sc ,001FORECLOSURE

!w !tj1!tcï !tcOF!sc ,001SPECIAL

!w DEFENDANT.!tj1!tc_ !tcASSESSMENT!sc ,001LIEN!te

@p0 To the Defendant: A lawsuit has been started against you in the above entitled court by .......... , plaintiff. Plaintiff's claim is stated in the written complaint, a copy of which is served upon you with this summons. The purpose of this suit is to foreclose on your interest in the following described real property:

[legal description]

!ixwhich is located at:

[street address]

In order to defend against this lawsuit, you must respond to the complaint by stating your defense in writing, and by serving a copy upon the person signing this summons within 20 days after the service of this summons, excluding the day of service, or a default judgment may be entered against you without notice. A default judgment is one where plaintiff is entitled to what he asks for because you have not responded. If you serve a notice of appearance on the undersigned person, you are entitled to notice before a default judgment may be entered.

IMPORTANT NOTICE

If judgment is taken against you, either by default or after hearing by the court, your real property will be sold at public auction.

You may prevent the sale by paying the amount of the judgment at any time prior to the sale.

If your real property is sold, you may redeem the real property at any time up to two years after the date of the sale, by paying the amount for which the real property was sold, plus interest and costs of the sale.

If you wish to seek the advice of an attorney in this matter, you should do so promptly so that your written response, if any, may be served on time.

!ix!tn5!tj1!tl[signed]!ss1@w1

!tj1!tl!ss1@w1

!tj3!tcPrint!sc ,001or!sc ,001Type!sc ,001Name

!tj1!tl(!sc ,003)!sc ,001Plaintiff!sc ,001(!sc ,003)!sc ,001!ttPlaintiff's

!tlAttorney

!tn5!tj1!tlP.O. Address!sc ,001@w1

!ixDated!sc ,001@w1!sc ,001!tj1!tlTelephone!sc ,001Number!sc ,001@w1!te!ix

NEW SECTION. Sec. 34. In foreclosing special assessment liens, it is not necessary to bring a separate suit for each of the lots, tracts, or parcels of real property or for each separate local improvement district. All or any of the lots, tracts, or parcels of real property upon which special assessments are delinquent under any and all final assessment rolls in the local government may be proceeded against in the same action. For all lots, tracts, or parcels of real property which contain a residential structure with an assessed value of at least two thousand dollars, all persons owning or claiming to own the real property shall be made defendants thereto. For all other lots, tracts, or parcels of real property, the persons whose names appear on the final assessment roll and assessor's tax rolls as owners of the real property charged with the special assessments or taxes shall be made defendants thereto.

NEW SECTION. Sec. 35. In foreclosing special assessment liens, the final assessment roll and the resolution confirming it, or duly authenticated copies thereof, shall be prima facie evidence of the regularity and legality of the proceedings connected therewith and the burden of proof shall be on the defendants.

NEW SECTION. Sec. 36. In foreclosing special assessments, if the lot, tract, or parcel of real property contains a residential structure with an assessed value of at least two thousand dollars, the summons shall be served upon the defendants in the manner required by RCW 4.28.080. For all other lots, tracts, or parcels of real property the summons shall be served by either personal service on the defendants or by certified mail.

NEW SECTION. Sec. 37. In foreclosing special assessments the action shall be tried to the court without a jury. If the parties interested in any particular lot, tract, or parcel of real property default, the court may enter judgment of foreclosure and sale as to such parties and lots, tracts, or parcels of real property and the action may proceed as to the remaining defendants and lots, tracts, or parcels of real property. Judgment and order of sale may be entered as to any one or more separate lots, tracts, or parcels of real property involved in the action and the court shall retain jurisdiction to others.

The judgment shall specify separately the amount of the special assessment or installments with interest, penalty, and all reasonable costs of the sale, including the title searches, chargeable to each lot, tract, or parcel of real property. The judgment shall have the effect of a separate judgment as to each lot, tract, or parcel of real property described in the judgment, and any appeal shall not invalidate or delay the judgment except as to the real property concerning which the appeal is taken. In the judgment the court shall order the lots, tracts, or parcels of real property therein described sold by the treasurer or by the county sheriff and an order of sale shall issue pursuant thereto for the enforcement of the judgment.

In all other respects, the trial, judgment, and appeals to the supreme court or the court of appeals shall be governed by the statutes governing the foreclosure of mortgages on real property.

Prior to the sale of the real property, if the real property is shown on the assessor's tax rolls under unknown owner or if the real property contains a residential structure having an assessed value of two thousand dollars or more, the treasurer shall order or conduct a title search of the real property to determine the record title holders and all persons claiming a mortgage, deed of trust, or mechanic's, laborer's, materialmen's, or vendor's lien on the real property.

At least thirty days prior to the sale of the real property, a copy of the notice of sale shall be mailed by certified mail to all defendants in the foreclosure action as to that lot, tract, or parcel of real property and, if the owner is unknown or the real property contains a residential structure having an assessed value of two thousand dollars or more, a copy of the notice of sale shall be mailed by certified mail to any additional record title holders and persons claiming a mortgage, deed of trust, or mechanic's, laborer's, materialmen's, or vendor's lien on the real property.

In all other respects the procedure for sale shall be conducted in the same manner as real property tax sales described in RCW 84.64.080.

NEW SECTION. Sec. 38. In foreclosing special assessments, all sales shall be subject to the right of redemption within two years from the date of sale. If the proceeds of the sale of real property exceed the delinquent special assessment or installments and the interest, penalty, and costs, the excess shall be remitted to the record owner of the real property prior to the sale or conveyance.

NEW SECTION. Sec. 39. Real property bid in by the local government or struck off to it pursuant to proceedings for the foreclosure of special assessment liens shall be held in trust by the local government for the fund of the local improvement district or the revenue bond fund into which special assessments in utility local improvement districts are pledged to be paid for the benefit of which the real property was sold. Any real property so held in trust shall be exempt from taxation for general state, county, and municipal purposes during the period that it is so held.

NEW SECTION. Sec. 40. The local government may relieve itself of its trust relation to a local improvement district fund or revenue bond fund into which special assessments are pledged to be paid as to any lot, tract, or parcel of real property by paying into the fund the amount of the delinquent special assessment for which the real property was sold and all accrued interest, together with interest to the time of the next call of bonds against such fund at the rate provided thereon. Upon such payment the local government shall hold the real property discharged of the trust.

NEW SECTION. Sec. 41. A local government may lease or sell and convey any such real property held in trust by it, by virtue of the conveyance thereof to it by a special assessment deed. The sale may be public or private and for such price and upon such terms as may be determined by resolution of the local government governing body. After first reimbursing any funds from which moneys on account of any lot, tract, or parcel of real property may have been advanced, all proceeds resulting from lease or sale thereof shall ratably belong and be refunded to the record owner of the real property prior to a sale or conveyance.

NEW SECTION. Sec. 42. The holder of a certificate of delinquency for general taxes, before commencing any action to foreclose the lien of such certificate, shall pay in full the special assessment or installments thereof which are a lien against the real property or any portion thereof, or he or she may elect to proceed to acquire title to the real property subject to certain or all of the special assessment or installments which are a lien thereon, in which case the complaint, decree of foreclosure, order of sale, sale, certificate of sale, and deed shall so state.

If the holder pays such special assessment or installments he or she is entitled to twelve percent interest per annum on the amount of the delinquent special assessment or delinquent installments thereof so paid, from the date of payment.

NEW SECTION. Sec. 43. In county foreclosures for delinquency in the payment of general taxes, the county treasurer shall mail a copy of the published summons to the treasurer of every local government within which any real property involved in the foreclosure proceeding is situated. The copy of the summons shall be mailed within fifteen days after the first publication thereof, but the county treasurer's failure to do so shall not affect the jurisdiction of the court nor the priority of the tax sought to be foreclosed.

If any real property situated in a local government is offered for sale for general taxes, the local government may protect the lien or liens of any special assessment outstanding against all or part of such real property by purchase thereof or otherwise.

NEW SECTION. Sec. 44. If a local government has bid in any real property on sale for the special assessment, it may satisfy the lien of any outstanding general taxes upon the real property by payment of the face amount of such taxes and costs, without penalty or interest, but this shall not apply where certificates of delinquency against the real property have been issued to private persons.

NEW SECTION. Sec. 45. If real property is struck off to or bid in by a county at a sale for general taxes, and is subject to special assessment in any local government, or has been taken over by the local government on the foreclosure of the special assessment, the local government may acquire the real property from the county at any time before resale and receive a deed therefor upon paying the face amount of such taxes and costs, without penalty or interest.

NEW SECTION. Sec. 46. Whenever real property struck off to or bid in by a county at a sale for general taxes is subsequently sold by the county, the proceeds of the sale shall first be applied to discharge in full the lien or liens for general taxes for which the real property was sold. The remainder, or such portion thereof as may be necessary, shall be paid to the local government to discharge all special assessment liens against the real property. The surplus, if any, shall be distributed as provided in chapter 84.64 RCW.

NEW SECTION. Sec. 47. Local improvement district bonds shall be issued and sold in accordance with chapter 39.46 RCW. Local improvement district bonds, or revenue bonds if a utility local improvement district is created, may be issued to obtain money sufficient to cover that portion of the special assessments that are not paid within the thirty-day period provided in section 20 of this act.

NEW SECTION. Sec. 48. (1) Any local government authorized to issue local improvement district bonds may create a fund for the purpose of guaranteeing, to the extent of the fund, the payment of the principal of and interest on local improvement district bonds that it issues or that it has issued. A cash balance of at least five percent of the face value of all outstanding local improvement district bonds shall be maintained in the guaranty fund. Moneys to establish and maintain a guaranty fund may be obtained from: (a) Utility rates and charges imposed by the local government; (b) another guaranty fund for local improvement district bonds that may previously have been established; (c) any surplus remaining in a local improvement district bond fund, where the bonds are guaranteed, that remains after payment of all outstanding local improvement district bonds; (d) a portion of the proceeds obtained from selling local improvement district bonds; (e) other moneys legally available for such purposes; and (f) earnings from investing money in the guaranty fund. Receipts from taxes imposed by the local government shall not be placed into its guaranty fund. Where applicable, the local government may bind and obligate itself to establish, collect, and maintain utility system rates and charges at such levels to provide revenues sufficient to maintain the guaranty fund.

(2) Whenever any local improvement district bond matures that is guaranteed by a guaranty fund, or an interest payment is due, and there is insufficient money in the appropriate local improvement district bond redemption fund to pay bond or interest payments, then the treasurer shall make the payment from the local improvement guaranty fund. If there is insufficient money in the guaranty fund to make the payment, then the payment may be paid by issuance and delivery of a warrant upon the local improvement guaranty fund.

(3) Whenever the cash balance in the local improvement guaranty fund is insufficient for the required purposes, warrants drawing interest of a rate fixed by the governing body may be issued by the local government against the guaranty fund to meet any liability accrued against it and must be issued upon demand of the owners of any bonds eligible for such payments that are guaranteed by this section and section 53 of this act, or to pay for any certificates of delinquency for delinquent installments of assessments as provided in subsection (4) of this section. Guaranty fund warrants shall be a first lien in their order of issuance upon the moneys set aside and paid into the guaranty fund.

(4) Within twenty days after the date of delinquency of any annual installment of a special assessment levied for the purpose of paying the local improvement bonds of any local government guaranteed under this section and section 53 of this act, the local government treasurer shall compile a statement of all installments delinquent, together with the amount of accrued interest and penalty appurtenant to each of those installments. Thereupon the treasurer shall immediately purchase certificates of delinquency for all such delinquent installments. Payment for all such certificates of delinquency shall be made from the local improvement guaranty fund, and if there is insufficient money in the fund to pay for such certificates of delinquency, the treasurer shall accept the local improvement guaranty fund warrants in payment therefor. All such certificates of delinquency shall be issued in the name of the local improvement guaranty fund, and all guaranty fund warrants issued in payment therefor shall be issued in the name of the appropriate local improvement district fund. Whenever any market is available and the governing body so directs, the treasurer shall sell any certificates of delinquency belonging to the local improvement guaranty fund, but any such sale may not be for less than face value thereof plus accrued interest from the date of issuance to date of sale.

The certificates of delinquency shall be issued by the treasurer, shall bear interest at the rate of eight percent per annum, shall be in each instance for the face value of the delinquent installment, plus accrued interest to date of issuance of the certificate of delinquency, plus a penalty of five percent of such face value, and shall set forth the:

(a) Description of the real property assessed;

(b) Date the installment of the special assessment became delinquent; and

Such certificates of delinquency may be redeemed by the owners of the real property assessed at any time up to two years from the date of foreclosure of such certificate of delinquency.

If any certificate of delinquency is not redeemed by the second occurring first day of January subsequent to its issuance, the treasurer shall then proceed to foreclose such certificate of delinquency in the manner specified in this chapter for the foreclosure of special assessment liens; and if no redemption is made within the succeeding two years the treasurer shall execute and deliver a deed conveying fee simple title to the property described in the foreclosed certificate of delinquency.

NEW SECTION. Sec. 49. Whenever there is paid out of a guaranty fund any sum on account of principal or interest upon the local improvement bond, or on account of purchase of certificates of delinquency, the local government, as trustee for the fund, shall be subrogated to all rights of the owner of the bonds, or delinquent special assessment installments so paid; and the proceeds thereof, or of the special assessment or special assessments underlying the same, shall become a part of the guaranty fund. There also shall be paid into each guaranty fund any surplus remaining in the local improvement funds guaranteed under sections 48 and 53 of this act, after the payment of all outstanding bonds payable primarily out of such local improvement funds. As among the several issues of bonds guaranteed by the fund, no preference exists, but defaulted interest payments and bonds shall be purchased out of the fund in the order of their presentation.

The governing body of every local government operating under sections 48 and 53 of this act shall prescribe by general resolution appropriate rules for the guaranty fund, not inconsistent with these sections. So much of the money of a guaranty fund as is necessary and is not required for other purposes under the terms of sections 48 and 53 of this act may, at the discretion of the governing body, be used to purchase real property at county tax foreclosure sales or from the county after foreclosure in cases where such real property is subject to unpaid special assessments securing bonds guaranteed under sections 48 and 53 of this act and such purchase is deemed necessary for the purpose of protecting the guaranty fund. In such cases the fund shall be subrogated to all rights of the local government. After so acquiring title to real property, the local government may lease or resell and convey the real property in the manner that the local government's real property is authorized to be leased or resold and for such prices and on such terms as may be determined by resolution of the governing body.

NEW SECTION. Sec. 50. If any local improvement guaranty fund has a cash balance, and the obligations guaranteed by the guaranty fund have all been paid off, then the governing body may cause this balance to be transferred to the local government general fund.

NEW SECTION. Sec. 51. The governing body of a local government issuing local improvement district bonds may create a reserve fund to secure the payment of the principal of and interest on these bonds. Such a reserve fund shall not exceed fifteen percent of the principal amount of the bonds issued. The cost of a reserve fund may be included as a cost of the public improvements financed by the local improvement district. The reserve fund may be created from the proceeds of the local improvement district bonds, installment payments, or any other money legally available for such purposes. Moneys in the reserve fund shall be used to reduce or eliminate installment payments as the local improvement district bonds are redeemed.

NEW SECTION. Sec. 52. A local government may contract with any other local government, or with the state of Washington, for the following purposes:

(1) To have the acquisition or construction of the whole or any part of the public improvements performed by another local government or by the state of Washington;

(2) To pay, from special assessments on real property within a local improvement district or from the proceeds of local improvement district bonds, the whole or any part of the expense of the public improvements ordered, constructed, acquired, or owned by another local government; or

(3) To integrate the planning, financing, construction, acquisition, management, or operation, or any combination thereof, of the public improvements of one local government with the planning, financing, construction, acquisition, management, or operation, or any combination thereof, of the public improvements of another local government or the state on such terms and conditions as may be agreed upon mutually including, but not limited to, the allocation of the costs of the public improvements and the allocation of planning, financing, construction, management, operation, or other responsibilities.

NEW SECTION. Sec. 53. A new section is added to chapter 39.46 RCW to read as follows:

(1) Local improvement district bonds issued by local governments under the authorities provided by chapter 39.-- RCW (sections 1 through 52 of this act) shall be subject to this section. The maximum term of local improvement district bonds shall be the lesser of thirty years or the estimated functional life of the public improvements financed by the local improvement district bonds.

Whenever local improvement district bonds are proposed to be issued, the governing body of the local government shall create a special fund or funds for the local improvement district from which all or a portion of the costs of the public improvements shall be paid. Local improvement district bonds shall not be issued in excess of the costs of the public improvements and shall not be issued prior to twenty days after the thirty days allowed for the payment of special assessments without interest, penalties, or costs.

Local improvement district bonds shall be payable exclusively from the special fund or funds, from a local improvement guaranty fund that the local government may have created as provided in section 48 of this act, and from a separate reserve fund or other security for the payment of principal and interest as provided in section 51 of this act.

(2) Local improvement district bonds shall not constitute a general indebtedness of the local government issuing the bond nor an obligation, general or special, of the state. The owner of any local improvement district bond shall not have any claim for the payment thereof against the local government that issues the local improvement district bonds except for payment from the special assessments made for the public improvements for which the local improvement district bond was issued and from a local improvement guaranty fund or reserve fund that may have been created. The local government shall not be liable to the owner of any local improvement district bond for any loss to the local improvement guaranty fund occurring in the lawful operation of the fund. The owner of a local improvement district bond shall not have any claim against the state arising from the local improvement district bond, special assessments, or guaranty fund. Tax revenues shall not be used directly or indirectly to pay, secure, or guarantee the payment of the principal of or interest on local improvement district bonds.

The substance of the limitations included in this subsection shall be plainly printed, written, engraved, or reproduced on: (a) Each local improvement district bond that is a physical instrument; (b) each published notice offering local improvement district bonds for sale; and (c) each official statement associated with the local improvement district bonds.

(3) If the local government fails to make any principal or interest payments on any local improvement district bond or to promptly collect any special assessment securing the bonds when due, the owner of the local improvement district bond may obtain a writ of mandamus from any court of competent jurisdiction requiring the local government to collect the special assessment, foreclose on the related lien, and make payments out of the special fund or guaranty fund if one exists. Any number of owners of local improvement districts may join as plaintiffs.

NEW SECTION. Sec. 54. Sections 1 through 52 of this act shall constitute a new chapter in Title 39 RCW.